Big Tech vs. Sherman Antitrust Act

The Sherman Antitrust Act, Section 1, must remain the primary cause of action against collusion scaled via the Internet

There are some common truths you and I deeply agree on. The value of success is one. The other is the value of open markets. These two principles resonate with everyone everywhere because we are all consumers.

The issue of BigTech, specifically, is a very difficult one because (as of June of 2021 and over the last decade) there are now only (5) companies that control 40% of Nasdaq 100 as the “gatekeepers” of e-commerce.

An e-commerce monopoly? Yes, and maybe, but primarily built by legal means.

However, not all of it… The following is a shortlist of common illicit agreements in e-commerce and raked platforms that form them, subject to prosecution under the Sherman Antitrust Act. Raked e-commerce marketplaces use these agreements to profit from scaled collusion, where, typically, a large number of third-party vendors agree to very simple price fixing and consumer allocation agreements. This is a form of “open collusion” with thousands (or hundreds of thousands) of blanket agreements between a platform and the service providers nationally, and sometimes, worldwide.

(1) Amazon Marketplace MFN agreements

(2) Amazon Home Services MFN and price-fixing agreements

(3) Uber Technologies price-fixing agreements

(4) Lyft Platform price-fixing agreements

(5) Apple Pay and App Store product tying practice

(6) Booking.com MFN agreements

(7) Grubhub (Seamless), DoorDash, Postmates, Uber Eats MFN and price-fixing agreements

(8) Apple iOS and Google Search product tying agreement

(9) Redfin Partner Program consumer allocation and price-fixing agreements

(10) Realtor.com ReadyConnect Concierge (Opcity) consumer allocation and price-fixing agreements

(11) Zillow Flex Program consumer allocation agreements

(12) Xome Concierge consumer allocation and price-fixing agreements

(13) Blend Realty consumer allocation and price-fixing agreements

(14) Opendoor Brokerage and Open Listings consumer allocation and price-fixing agreements

(15) Rocket Homes (Rocket Companies) consumer allocation agreements

(16) mellohome (loanDepot) consumer allocation agreements

(17) HomeLight consumer allocation agreements

(18) HomeAdvisor (Angi) Handy price-fixing agreements

(19) Better.com consumer allocation and price-fixing agreements

(20) OJO Labs (Movoto.com) consumer allocation agreements

It is irrelevant how “Big” a technology company is that chooses to promote restrains of free trade via scaled collusion on the Internet. Big tech platforms, such as Amazon, are merely the most visible to the public, but they are not the only ones that take advantage of price-fixing, consumer allocation, and price parity agreements with third parties.

To turn BigTech platforms into utilities to fix their Sherman Act problems is entirely counter-productive.

For example, in California, Uber is a public utility. The State CPUC must set rates for Uber, but it refuses to do it because it physically can’t and doesn’t want to. This single California Supreme Court ruling prevents consumers and legitimate competitors in California to sue Uber for price-fixing. While Uber can no longer be taken to court in California, it continues to maintain full control of “dynamic” pricing for third-party contractors (Uber drivers,) 100% in self-interest. Uber is a marketplace, a rigged one, neither Uber wants to hire their mobile workforce, nor is the California government really treating Uber as a utility, but merely “calls” it one.

We cant solve gig economy problems and price-fixing agreements by treating media services as utilities — these online services are too fluid and too complex for a government to build and maintain. A government also cannot be allowed to shut down or influence a media company, because January 6, 2021, can happen again, and the government cannot be allowed to influence media on that day.

A government is not smart enough to know how much an Uber ride costs, on what day, and why. The government’s only job is to level the playing field to allow for open markets to operate, to allow new and better platforms to be developed — by entrepreneurs.

Internet is a free speech medium and it must operate subject to federal laws. The free speech rights of Internet companies cannot be infringed, free speech is not a utility. A media company must be able to succeed immensely so that new companies can be formed in the future. The Sherman Antitrust Act allows for such distinction to be made because it addresses the true cause of illegal monopolies: agreements that restrain free trade.

The Sherman Antitrust Act, Section 1 must remain the primary cause of action against media companies that break antitrust laws. Companies like Uber and Amazon should be allowed to exist as free and open digital marketplaces, but they must also be held accountable for breaking the law. This approach makes it worthwhile to develop open e-commerce alternatives by new startups despite the monopolistic barriers built by price fixed marketplaces. Google Shopping, for example, now offers third-party sellers a 0% commission user experience to counter Amazon’s MFNs.

The antitrust law cannot become a weapon against the success, because all startups will fail without an option to say I am the next “Google for X” or the next “HomeOpenly for Y.” Whatever it is entrepreneurs are building, the government must not commoditize media services, allowing us to evolve and to compete into truly successful and legally-structured enterprises.

Free speech is a product of innovation, it is never truly successful. Yes, free speech must be limited by basics such as defamation, collusion, treason, and, hopefully, a common sense of not using biased and poorly-built products, but not by anyone with the power to suppress it with a government paycheck.

Free speech must elevate the power of free markets and open governments must use their power to enforce established regulations in support of successful media, even if a product of free speech becomes popular enough to be referred to as the “gatekeeper.” Go build a better one.

Author: Litesand

Antitrust, real estate, e-commerce, fintech, proptech, bigtech

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